Polkadot Faces a Sharp 9% Flush After 35% Rally: Bullish Rebound Ahead?

• Polkadot faces a sharp 9% flush after a 35% rally, triggering heavy long liquidations.
• Funding rates turned positive while DOT exchange outflows pointed toward reduced selling pressure.
• DOT could rebound, but a deeper decline toward $1.01 remains possible.

Polkadot — DOT, has erased part of a powerful weekly rally with a sharp 9% decline. DOT gained 35% over seven days before sellers suddenly took control. However, market data now tells a more complicated story. Exchange flows turned negative while derivatives positioning started improving. That split leaves traders watching closely for signs of a rebound. The key question remains simple. Did DOT lose demand, or did leverage simply clear before another move?

Funding Rates Signal a Potential Shift

Polkadot's Funding Rate started falling on September 10. The reading later moved into negative territory as selling pressure increased. By September 11, Funding Rates reached negative 0.0033%. Such a reading showed growing short exposure among leveraged traders. Short sellers appeared more confident as DOT prices moved lower. However, the trend soon changed across derivatives markets.

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